Introduction to Business Intelligence (BI)

Jevitha KP Lecture 1

Topics

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BI Definition Why Business Intelligence ? Data Transformation to Decisions Challenges faced by earlier systems Goals of BI Significance of BI BI Examples Types of decisions supported by BI Users of BI at different levels BI for Past, Present & Future Types of BI tools BI Products Open Source BI Products Proprietary

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BI Definition
Forrester Research often defines business intelligence in one of two ways: Using a broad definition: "Business Intelligence is a set of methodologies, processes, architectures, and technologies that transform raw data into meaningful and useful information to enable more effective strategic, tactical, and operational insights and decision-making. The above BI definition also includes technologies such as data integration, data quality, data warehousing, master data management, text and content analytics, which form the Information Management segment. Narrow Definition : is used when referring to just the top layers of the BI architectural stack such as reporting, analytics and dashboards.
Source: en.wikipedia.org/wiki/Business_intelligence
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Why Business Intelligence ?

Increased Profitability Apply BI to evaluate customers to distinguish between profitable

and non-profitable customers.

Decreased costs BI can be used to evaluate organizational

costs which can lead to

Improved logistics management Lowered operational costs Lesser investments

Improved Customer Relationship Management (CRM) Apply analysis of aggregate customer information to provide

improved customer service responsiveness Discover selling opportunities Increase overall customer loyalty
Decreased Risk Applying BI methods to credit data to improve credit risk analysis Analyse supplier and consumer activity to streamline supply

chain
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BI Data Transformation
BI uses set of processes, technologies and tools

to transform raw data to meaningful information. Information is mined to provide knowledge (KDD Knowledge discovery from data) Knowledge gained is used to provide beneficial insights, which lead to impactful decisions ( Actions). RESULT Business Benefits like increased profitability, increased productivity, reduced costs, etc. Raw Data Meaningful Information Knowledge Discovery Beneficial Insights Impactful decisions Business Benefits. Business Intelligence

Abstraction Pyramid
Knowledge and Intelligence
Level of Abstracti on

Information

Data

Size of Data
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Challenges faced by earlier systems

Long process to generate reports Involve all

phases of SDLC lifecycle Requirements gathering, analysis, design of new schema, read and load data from different IT applications, generate reports. Long delay between the request and delivery of reports Inaccurate data at different locations due to synchronization delay multiple versions of truth. Many different versions of same data do not serve any purpose and are discarded. Business Intelligence Data is not formatted to support complex analysis

Challenges faced by earlier systems

Too Much of DATA, but too little INSIGHT ( INFORMATION)

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Goals of BI
Improved Decision Making getting the right information (NOT data), to the right decision makers, at the right time. Fact-based decision making no longer made on gut feeling Eg: Restaurant with multiple branches collect food wastage facts everyday BI used to decide on process to reduce the food wastage and helps to set targets to achieve the same. Single version of the truth if same piece of data is available at more than one location, then all the copies of data should agree wholly and in every aspect. Eg: Customer walking into a Restaurant Waiter (check on his PDA) should be able to give the data on availability of a particular food item, which has to be in Business Intelligence sync with the kitchen PDA.

Goals of BI
360 degree perspective on your Business

Each person in the team will look at the data from his/her role and will look for attributes that will add value for decision making.
Eg: Food wastage will be viewed by different departments in different perspective finance by cost, house keeping by disposal methods, chefs by reason for rejection by guests, etc.
Faster Synchronization The data and facts

are synchronized across systems and people quickly in whichever format required.
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Significance of BI
A business can use the BI applications and technologies to gain valuable information on : Changing trends in market share Changes in customer behavior and spending patterns Customers' preferences

Company capabilities market conditions Competitor study Share information effectively Improving performance

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BI Examples
HOTEL CHAIN Use BI applications to compile statistics on average occupancy and average room rate to determine revenue generated per room. It also gathers statistics on market share and data from customer surveys from each hotel to determine its competitive position in various markets. Such trends analysis can be conducted year by year, month by month and day by day, giving the corporation a picture of how each individual hotel is faring.
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BI Examples
Banks Bank bridges a legacy database with departmental databases, giving branch managers and other users access to BI applications to gain insights on the most profitable customers are or which customers they should try to cross-sell new products to. The use of these tools frees information technology staff from the task of generating analytical reports for the departments and it gives department personnel autonomous access to a richer data source.
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Types of decisions supported by BI

Strategic Level Long term decision making.

Affects entire organization. Eg: The next set of target cities for expansion of the business Tactical Level - More frequent than strategic decisions and have lesser impact than the above. Affects single unit(s)/ department(s). Eg: Discounts to given to customers, right months to redeem loyalty points, etc. Operational Level Most frequent and have even more lesser impact. Affects single unit/function. Help in conducting day-to-day operations of the business. Eg: employee holiday management for 24/7 service, etc.
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Types of decisions supported by BI

High Impact

Strategic

Low Frequen cy

Tactical

Low Impact

Operational

High Frequen cy

Impact and Frequency

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Users of BI at Different levels

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BI for Past, Present & Future

Know the Past

What happened ? Why did it happen ? What is happenning ? Why is it happening ? What will happen ? STEPS TO BE TAKEN

Analyze the Present

Predict the Future

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Types of BI tools
The key general categories of business intelligence tools are:
Spreadsheets Reporting and querying software: tools that extract, sort,

Source : http://en.wikipedia.org/wiki/Business_intelligence_tools 18 Business Intelligence

summarize, and present selected data OLAP: Online analytical processing Digital dashboards Data mining Data warehousing Decision engineering Process mining Business performance management Local information systems

BI Products Open Source

Free Products

Eclipse BIRT Project RapidMiner SpagoBI R KNIME

Commercial Products

Jaspersoft: Reporting, Dashboards, Data Analysis, and Data Integration Palo (OLAP database): OLAP Server, Worksheet Server and ETL Server Pentaho: Reporting, analysis, dashboard, data mining and workflow capabilities
Source : http://en.wikipedia.org/wiki/Business_intelligence_tools 19 Business Intelligence

BI Products Proprietary
Free Products
InetSoft MicroStrategy - MicroStrategy Reporting Suite QlikTech - QlikView

Commercial
Oracle Business Intelligence Enterprise Edition Plus

(OBI EE Plus) IBM Cognos Informatica Microsoft

SQL Server Reporting Services SQL Server Analysis Services PerformancePoint Server 2007 Proclarity Microsoft BI Source : http://en.wikipedia.org/wiki/Business_intelligence_tools
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Done with Lecture 1... Any Questions??

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Have a great day !

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